With one nation one tax jibe, government is keen to implement the Goods and Services Taxes (GST) from next financial year but to make it acceptable for every sector is the most difficult challenge.
GST Council meet, which is being held from October 18-20 to discuss tax rate, has also proposed a four-slab GST tax structure of 6, 12, 18 and 26 per cent with lower rates for essential items and the highest for luxury goods.
To undertake this arduous task, MSME Ministry organized a brain storming session on issues related to GST with regards to MSME sector on October 14. Union Minister of MSME, Kalraj Mishra inaugurated the workshop. The industry association across the country participated in the session.
Mishra said, “I want to thank all MSME associations for their inputs on GST. This bill has many good things as well as bad which can raise difficulties for MSMEs. That is why we have invited you for suggestions.”
MSME Secretary KK Jalan said that the MSMEs should raise all procedural relation with GST for MSMEs. So that, it can be implemented smoothly in this sector.
Giriraj Singh, Minister of State, MSME said, “Prime Minister is very much concerned for MSMEs that is why we are here to discuss this issue with you.”
Haribhai Parthibhai Chaudhary, Minister of State, MSME said that we will take all necessary steps to make GST work for you. Our aim is to growth of MSMEs.
Laghu Udhyog Bharti’s representative at the session, said, “One and only level playing field base for MSMEs has been excise duty exemption of 1.50 cr for the last some year. If this exemption got removed then MSMEs will face difficulties at many levels. So this limit should be remained and increased. Threshold exemption limit for MSMEs which is now fixed at Rs.20 lakh should be increased too.”
Sanjay Bhatia, President, the Confederation of Micro, Small and Medium Enterprises (CMSME) raised the issue of regional language and said, “GST related all procedure is in English. It should be in other regional language too because MSMEs at local level do their work in native languages. Cancellation of registration is very complex procedure in GST Bill so there is need to look upon this.”
“Transitory provision should be as much convenient as much possible. There should not be complexity like when VAT came into effect. For this, I request that there should be GST committee for MSMEs including member of industry association which look upon these issues.”, he added.
Sudarshan Sareen, President, All India Confederation of Small and Micro Industries Associations welcome the reform and said, “The most crucial part of GST is tax rate. High rate will be inflationary and will have negative impact on MSMEs. Rate should not be more than 15 to 16 per cent otherwise it would adversely affect the sector.”
NASSCOM representative asked, “If someone wants to float a small e-commerce company then which kind of supply rules in terms of global sourcing and in-house sourcing in India will be applied with regards to GST?”
Madhya Pradesh Small Scale Industries’ representative raised the issue of interest rate on payments and said, “1.5 to 2 per cent interest rate will going to hamper MSME. Even in income tax, on late payment, interest rate is below 1. It will adversely affect to our working capital.”
MSME Associations from South India talked about complex issues like stock-transfer, interest rate, input tax and way bill etc.
Recently, Export Promotion Council for Handicrafts (EPCH) has also requested to exempt the sector from the Goods and Services Tax (GST). EPCH Executive Director Rakesh Kumar said in a statement, “The sector, which has 100 percent exemption under central excise, may be covered under the GST regime with higher taxes and this can make the product un-competitive in the international market.”
Replying to the suggestion of members, Senior Revenue Officer, P. K. Mohanty said, “We have tried to make it as liberal as possible – be it input tax or threshold limit. But we will relook your suggestion.”
Additional Secretary and Development Commissioner S N Tripathi thanked the all ministers, officers and industry members for their support and hoped for best.
